Friday, November 07, 2008

Well, SPISpyers had two
chances to exit the latest short. The first was an hour after
the first entry (with a gain of about 35 SPI points). Those who didn't
were advised to exit yesterday with a gain of about a hundred
points (probably closer to 90). Not bad, considering that the entire
trade was severely compromised by a huge lurch skywards.

If I can get into my e-mail server this morning I will post
all three of the e-mails relating to the trade, the last of which -
sent yesterday at 3:27 p.m. - pointed out that the exit was mandatory
since today was going to be a bounce day on Wall Street. It also gave
some preliminary guidance as to when the short will be re-instated
(markets are going much lower,
Dearest Reader... muchmuch lower).

The NBER last night finally declared what the entire world has
known for six months - economic life in the US has stalled for everyone
who is not in the top 0.5% of the income distribution.

Normally, the NBER is about as good at recognising recession
as S&P and Moody's are at recognising credit risk - the NBER
will usually spot a recession about a year after it finishes,
and S&P and Moody's will recognise a possible credit default
just after the company files for Chapter 11.

This time it's somewhat different: the politically-appointed
hacks at the NBER can't possibly stall any longer, but they realise
that we are currently about half way down the slope, and that this will
not be a 'V' shaped recession, or even a 'U' shaped recession. This
will be An 'L' shaped recession, but there will be a second 'L'
sticky-taped to the bottom of the first 'L'.

By the end, there will have been a major global war (started
by Israel, in all likelihood), and the US will have collapsed.

Economic News

Consumer Credit (for September) rose by
$6.9 billion, and the prior month - the worst on record - was revised
upward.

So let's get this straight: during the period in which your
political masters told you that credit markets were stalled and a
bailout of banks was necessary, US consumers managed to borrow about
the same amount as they borrowed in April, May and June of this year.

Sure, there was a sharp fall in August, but recall that Fannie
and Freddie were nationalised on September 7th, and AIG was bailed out
on September 16th. By late September the US decided that the financial
superstructure of their 'capitalist' economy needed to be owned by the
government.

In other words, much of the story we have been fed was the
result of the August data point - and yet consumers had no difficulty
getting credit in September?

If the data for October show little or no contraction in
consumer credit, the incoming administration ought to suspend all
payments pursuant to Mr Hankie's Crony Transfer Plan - and they ought
to
claw back the $35 billion of bailout cash that has already been used to
pay bonuses.

After all, if banks continue to lend to consumers despite
having toxic waste in their balance sheets, shareholders ought to
punish management, not taxpayers.

Other Economic Stats:

Pending Home Sales fell by 4.6% to 89.6;
this indicates that the level of activity in the housing market is 10%
lower than it was in 2001.

The big story was the Non-farm Payrolls
report, which showed a 240,000 fall in aggregate
non-farm employment.

Heckuva job, Bushie - half a million fewer
Americans employed in the last two months, and almost a million
and a half jobs lost this year. The (highly manipulated) Unemployment
Rate - now at 6.5% - is the highest in 16 years.

The Non-farm payroll number was an 'improvement'
on the prior month, which was revised downward from -159,000 to
-284,000. Had the prior month not been revised, the 'delta' for
non-farm payrolls would have made market participants very nervy. So
the political class revised history to make the current observation
look good by comparison - as usual, your scumbag overlords have no
qualms about massaging the data.

Fed Open Market Operations

The Fed's Open Market Operations desk performed
another liquidity drain - a 3 Days reverse
repurchase totalling $25bn, all in Treasury-backed
collateral.

Headline Indices

The Dow Jones Industrial Average
advanced +248.02 points (2.85%) to 8943.81 points. The index high for
the day was 8961.57, while the low was 8696.03.

Within the index, 28 issues rose; advancing volume was 847.67m
shares. Only 2 Dow components fell, but the combined to post
declining volume of 132.83m units.

Contributing to the advance were -

AIG (AIG) +0.24 (12.8%) to $2.11 on volume of 72.94m shares;

Alcoa (AA) +0.93 (9.1%) to $11.19 on volume of 19.3m shares;

Exxon-Mobil (XOM) +4.39 (6.3%) to $73.95 on volume of
44.16m shares;

Intel (INTC) +0.76 (5.5%) to $14.63 on volume of 72.57m
shares; and

Du Pont (DD) +1.45 (5%) to $30.46 on volume of 7.65m shares.

The S&P500 Index advanced
+26.11 points (2.89%) to 930.99 points. The total volume traded in the
index was 3.91bn
units. Within the index, 416 issues rose and 72 fell.
Advancing volume was
2.99bn units and declining volume was 923.37m units.

A total of 3524 issues traded today on the NYSE; today's total
volume was 4.97bn shares. A total of 2385 stocks posted gains for the
day, and volume in advancing issues totalled 3.71bn shares. Exerting
downwards pressure on the index were 1048 losers, which accounted for a
total declining volume of 1.18bn shares. 5 stocks made new 1-year highs
on the NYSE, while 152 shares plumbed new 52-week depths.

On the Nasdaq 2972 tickers traded today; total Nasdaq volume
was 1.88bn shares. A total of 1781 stocks posted gains for the day,
with aggregate volume of 1.37bn shares changing hands in the day's
winners. The red zone of the Nasdaq exchange comprised 1074 losers, and
total declining volume was 460m shares. 5 Nasdaq-listed stocks hit
new 52-week highs, while 179 shares dipped to new 1-year lows.

Major Market Statistics

Index

Close

Gain(Loss)

%

Dow Jones Industrial Average

8943.81

+248.02

2.85%

S&P500 Index

930.99

+26.11

2.89%

Nasdaq Composite

1647.40

+38.70

2.41%

Nasdaq100

1271.62

+29.65

2.39%

CBOE Volatility Index

56.10

-7.58

-11.9%

CBOE Nasdaq100 Volatility Index

55.14

-7.56

-12.06%

Dow Darlings

Alcoa (AA) +0.93 (9.1%) to $11.19 on
volume of 19.3m units

Exxon-Mobil (XOM) +4.39 (6.3%) to $73.95
on volume of 44.3m units

Intel (INTC) +0.76 (5.5%) to $14.63 on
volume of 72.7m units

Du Pont (DD) +1.45 (5%) to $30.46 on
volume of 7.7m units

Chevron (CVX) +3.35 (4.8%) to $73.46 on
volume of 15.7m units

Dow Duds:

General Motors (GM) -0.44 (9.2%) to
$4.36 on volume of 83.5m units

JPMorganChase (JPM) -0.51 (1.3%) to
$37.75 on volume of 49.7m units

Most Traded Dow stocks:

Citigroup (C) +0.3 (2.6%) to $11.82 on
volume of 99m units

General Motors (GM) --0.44 (9.2%) to
$4.36 on volume of 83.5m units

Bank Of America (BAC) +0.37 (1.8%) to
$20.49 on volume of 81.2m units

General Electric (GE) +0.52 (2.8%) to
$18.86 on volume of 78.5m units

Intel (INTC) +0.76 (5.5%) to $14.63 on
volume of 72.7m units

Precious Metals

Precious metals futures advanced modestly - looks like next
week is the tipping point, but we'll need the Commitments of Traders
data to be sure -

Precious Metals Futures

Index

Close

Gain(Loss)

%

Gold

736.5

4.3

0.59

Silver

10.02

-0.035

-0.35

Palladium

224.05

1.45

0.65

Platinum

856.4

18.1

2.16

The Gold Bugs index (XAU) contains 16
components; the total volume traded in the index was 89.55m units.
Within the index, 14 issues rose, with aggregate volume of 78.21m
units; 1 stock fell, with aggregate volume of 4.9m units.

Today the index rose by 3.29 points (4.02%) to 85.16 points.
Contributing to the advance were -